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Breitling’s private equity owners have slashed the valuation of the Swiss watchmaker to as little as half its 2023 level, as performance has faltered under CVC and Partners Group’s joint ownership.
The two buyout firms are reviewing the strategy of Breitling after pressure from CVC, three people familiar with the matter said, as the brand has struggled with an expensive store rollout at a time of subdued demand for luxury watches and US tariffs on Switzerland.
Amsterdam-listed CVC handed over majority ownership of the company to Partners as part of a $4.5bn sale three years ago, after selling a small interest to the Swiss buyout firm in 2021. CVC had initially bought the 140-year-old watch brand for about €800mn in 2017, but held on to a roughly 20 per cent stake in 2023 through a new fund.
The 2023 deal was controversial inside Partners Group, according to two people familiar with the matter, due to questions over how much more Breitling could expand after its rapid growth under CVC’s ownership.
The two buyout firms still share control, but Partners Group holds significant sway with more than 50 per cent of the shares and Partners co-founder Fredy Gantner chairing the watch group’s board.
CVC has marked its stake down to about 0.5 times invested capital, based on the level at which it reinvested in 2023, according to a person familiar with the matter. Partners Group values its holding at roughly 0.7 times, which a person close to the firm said was because it invested at a lower valuation in 2021 than it did in 2023.
Partners Group, CVC and Breitling said there had been “no differences of opinion between [the private equity firms] about Breitling’s strategy”.
The Swiss watch industry is notoriously opaque, making it difficult to assess performance with precision. Most leading brands are privately held and disclose little financial information.
But momentum at Breitling has cooled since 2022, with industry data suggesting the brand’s climb up the Swiss watch revenue rankings has plateaued.
Morgan Stanley and Swiss consultancy LuxeConsult estimate that Breitling’s sales declined about 3 per cent last year, lagging both the broader Swiss watch market and the sector’s strongest private brands.
Performance in the UK — which accounts for 8 per cent of revenues — has been particularly troubling, one of the people said, with sales in the country down 25 per cent in the year to March 2025. In the US, its largest market, Breitling is facing stiff competition from brands such as TAG Heuer and Tudor.
Last August Moody’s downgraded Breitling’s debts, noting a “sharp” decline in earnings in the year ending March 2025, “exacerbated by increased fixed costs” stemming from opening more Breitling shops.
CVC started the programme of store openings in 2017, but the recent expansion of Breitling’s boutique network to around 300 stores had been controversial, one analyst said. “That rollout is coming to an end,” a person familiar with the strategy said.
Breitling’s owners are now considering cost cuts, that person added.
Known for its chronographs and aviation heritage, Gantner regarded Breitling as a trophy asset for his Swiss firm, one former Partners employee told the FT last year, and a mock Breitling shop sits in Partners’ global headquarters near Zurich. “People’s impression was that it is his baby,” the employee said.
One person close to Partners Group said that Breitling’s momentum relative to direct competitors remained intact, and that they were “confident Breitling will be a strong initial public offering candidate in 2028, maybe 2027, maybe 2029”.
Another person close to the firm added that the company had made “significant investments into growth initiatives” such as the purchases of two watch brands and sponsorships with NFL and Aston Martin.
Moody’s said its rating downgrade stemmed from Breitling’s “high sales concentration in a single brand” compared with larger and more diversified watch groups.
The rating agency also cited the brand’s “highly leveraged financial structure” and history of borrowing to return cash to shareholders. The company borrowed over €1bn to pay dividends under CVC’s ownership, according to PitchBook.
Moody’s added that Breitling retained “adequate liquidity” and “positive long-term growth prospects”, however.